Kluwer Competition Law Blog

On June 2, 2025, the EU Commission (Commission) rendered its decision in re Case AT.40795 Delivery Hero/Glovo (Delivery Hero).  This is an important new precedent, to be delivered as part of any deal-making post-integration compliance training.  Failure to heed the guidance contained in Delivery Hero is risky, as now also tangibly illustrated by the size of the fine: EUR 329 million imposed on both companies for the four year period they were supposed to continue operating independently.

Particular attention should be given to this precedent in the fast-moving start-up scene, with IoT investments and in financial services, where comparatively large investments in (at least initially) non-controlling stakes are often secured through board positions and the like.  The message of Delivery Hero is clear: as long as there is no sole control achieved, companies remain independent.  Care needs to be taken to avoid a premature management creep in aligning labour law approaches and commercial positioning.

 

Dual focus: minority stakes, no poach

The Delivery Hero decision is of key importance for two reasons, as it formalizes the EU’s position regarding the facilitation of a cartel through:

1. The functioning of labour markets with no poach arrangements (i.e. arrangements not to hire or actively approach each other’s employees); and
2. The use of minority stakes to remove competitive constraints.

Both aspects of Delivery Hero will require amending or at least fine-tuning compliance when it comes to exchanging sensitive information during and after acquiring a minority stake (read: clean team rules, who should sit on the board, what can be discussed at the board / any special step-out or reporting provisions, etc.).

 

Four (expensive) years to becoming one company: Delivery Hero’s slow path to control

Delivery Hero and Glovo are both active in the online food delivery sector, Delivery Hero is by origin German, Glovo Spanish.  In July 2018, Delivery Hero took a 15% non-controlling stake in Glovo, which was progressively increased through subsequent investments, setting the two companies on course to full merger in 2022.  The latter was cleared by the Spanish Comisión Nacional de los Mercados y la Competencia (CNMC) in February 2022, see here, whereby Delivery Hero acquired full control over Glovo, near four years after the initial stake.

The Commission found that, by the time Delivery Hero acquired sole control over Glovo (in July 2022, upon consummation), the two companies had already and pre-emptively so removed progressively the competitive constraints between them and “replaced competition with multi-layered anticompetitive coordination” (as per the EU press release as referenced above).  The Commission found that during this period, the two companies had agreed:

• Not to poach each other’s employees;
• To exchange commercially sensitive information; and
• To allocate geographic markets.

Following two Commission dawn raids (in June 2022 and in November 2023) at Delivery Hero and Glovo premises, two years of investigation, and the issuance of a Statement of Objections in July 2024, the companies are set back EUR 223 million (Delivery Hero) and EUR 106 million (Glovo) through settlement.  While the EU press release provides scant detail on the fine calculation, these absolute numbers show that the Commission attached a material gravity to the infringement, only applying the 10% settlement discount.

Side-note, the Commission takes great care to identify the Delivery Hero investigation as an “own-initiative inquiry”, prompted by information received “from an (unnamed) national competition agency” and “via the anonymous whistleblower tool”.

Let’s look at the dual focal points in some more detail in the following.

 

No poach

No poach as an antitrust concern

No poach as an antitrust concern emerged in the U.S. in late 2016, when the U.S. Department of Justice and the U.S. Federal Trade Commission issued their joint “Antitrust Guidance for Human Resource Professionals” (as updated in January 2025).  The first criminal indictment followed in January 2021, against Surgical Care Affiliates (“SCA”).  In Europe, while some national competition agencies where quicker to pick up no poach, it took till October 2021 for then-Competition Commissioner Vestager to pronounce the Commission’s big picture view on no poach, in her “A new era of cartel enforcement” speech.  In that speech, she states:

• “Some (…) cartels do have a very direct effect on individuals, as well as on competition, when companies collude to fix the wages they pay; or when they use so‑called ‘no‑poach agreements’ as an indirect way to keep wages down, restricting talent from moving where it serves the economy best”;
• “And that’s not the only way that an agreement not to poach each other’s staff can create a cartel. There are markets where you can only compete if you have expensive machinery, or costly IP.  And then there are those where the key to success is finding staff who have the right skills.  So in these cases, a promise not to hire certain people can effectively be a promise not to innovate, or not to enter a new market”.

Ms. Vestager’s speech in late 2021 was eagerly anticipated, finally positioning the EU after a long silence in Europe vis-à-vis no poach (while the U.S. was busy making antitrust headlines).  Accordingly, her statements were widely reported at the time – but seemingly not within the online food delivery sector, where by then Delivery Hero and Glovo had not only concluded a shareholders agreement (formalizing the initial investment in July 2018) containing a limited reciprocal no-hire clause for certain employees, but shortly after expanded this agreement to a general arrangement not to actively approach each other’s employees.

 

The Commission’s read of no poach in Delivery Hero

In the press release now accompanying the decision, the Commission identifies as the central issue with no poach “fewer job opportunities for employees” and positions its investigation into Delivery Hero to contribute to “ensuring a fair labour market where employers do not collude to limit the number and quality of opportunities for workers but compete for talent”.  Competition Commissioner Ribera, during her remarks presenting the decision, added that no poach agreements are a “purchasing cartel” where companies no longer compete for labour input (and thus harm citizens directly by suppressing wages and reducing labour mobility; “competition rules matter to citizens’ daily life”).  She also held that no poach arrangements impede an industry’s overall performance by lowering productivity and stifling innovation.

 

Relevance for compliance training

Delivery Hero will require special training modules for HR professionals what to say, or not to say, how to formulate labour agreements, etc.  Co-opting no poach arrangements into the shareholders agreement – Delivery Hero-style – is certainly not advisable.

In this regard, compliance professionals will be well-advised to be mindful of the Commission’s admission that in reaching its decision in the Delivery Hero case, it was assisted in its investigative efforts by a whistleblower using the anonymous whistleblower tool available on the EU website.  Disgruntled (former) employees may well spill the beans on practices which they found limitative, triggering regulatory interest.

In the international context, calibrating compliance efforts between major jurisdictions will remain complex, certainly where dispatch employees congregate in particular areas (think financial hubs, silicon hubs).  Different “sending” jurisdictions will cover their respective labour contracts, and those need to “fit” the requirements of the “receiving” jurisdiction – now increasingly also with an antitrust component.  While the approach to no poach has not yet settled (the U.S. might have crested after the original indictment in SCA was dismissed in November 2023; the EU may or may not end up treating no poach as a true “by object” infringement devoid of any effects assessment, as is also at stake in Tondella), expert advice would seem advisable, and regular updating, too.

 

Minority stakeholder conduit for cartelization

Minority stakes as facilitators

Best to start off on the second focal point of Delivery Hero with Commissioner Ribera’s remarks, where she held that “of course, owing a stake in a competitor is not illegal in itself”.  The problem emerges (only) when that stake is “used to gain insight information and influence decisions in ways that can harm competition”.

The simple read is, short of two competitors becoming one company, and instead remaining independent market players, the EU’s far-reaching by object interpretation of exchanges (viz., no need to agree) of sensitive forward-looking information being on par with actual fixes of prices, quota, capacities, costs, territories, customers and the like remains in full force.

The harder read is, how did Delivery Hero and Glovo cross the thin red line?  Commissioner Ribera states that they exchanged sensitive information “beyond what was needed for a corporate investor to protect [or, at a different place in her remarks, to monitor] a financial investment decision”.  What do we learn about the “beyond”, where did a premature management creep go too far:

• Delivery Hero and Glovo apparently shared “strategy documents” and held “meetings to share knowledge” including on “current or future commercial strategies, (and) new offers”;
• While the EU treats the market allocation aspects as a third strand of the infringement in its decision, systematically, these aspects also emerged due to the ability the minority stake gave Delivery Hero to “convince Glovo to share markets in (..) two ways: (i) directly, by using or threatening to use its approval rights over specific decisions, and (ii) indirectly, by influencing other Glovo shareholders”. Effectively, Delivery Hero and Glovo discussed and agreed which of them would enter new national markets where neither had a presence yet, and they also refrained from entering markets where the other was already present.

 

Relevance for compliance training

Minority stakes will (and should) continue as a means for investment, as they:

• Allow companies to collaborate strategically without triggering a full acquisition or merger;
• May support joint R&D, co-development of products, or technology sharing, especially in the fast-moving start-up scene, in industries like IoT, biotech, or automotive, and in financial services;
• And do so in a commercially less risky and more flexible manner than a merger.

While not leading to control, minority stakes are often secured through board positions and the like, and – as in the case of Delivery Hero and Glovo – they also allow a more cautious managerial decision-taking as to whether or not a more fulsome integration makes commercial sense over time.

Where, then, is the antitrust limit of “co-opetition” (compare the book, same title, by Brandenburger and Nalebuff, 1996), or, how best to advise deal makers to put their minority stake in place without risking the EUR 329 million fine Delivery Hero and Glovo accrued on top of their investment?  Some key compliance pointers based on experience dealing with the general risks attached to sensitive information exchanges between competitors in the EU include:

• Use strict clean team rules when negotiating;
• Install clear and upfront protocols (ideally in the shareholders agreement) for the functioning of the board, the parameters of information to be discussed / not discussed within the remit of the minority stake, a “step out” process to avoid spoliation, etc.; and
• Appoint individuals to board positions that are less likely to be at risk, and provide them with guardrails alike targeted compliance training and structural firewalls to lower exposure.

 

Afterthought: beware the social media treasure trove

For good measure, Delivery Hero also serves as a cogent reminder that social media / messaging services (alike WhatsApp, Telegram, Facebook Messenger) are no safe haven from antitrust enforcement.  If anything, Delivery Hero shows that ever since the Nexans judgment, EU regulators have become quite keen on getting their hands on private social media or personal messaging accounts of employees, when (also) used for business purposes.  As useful all-in-one compliance training illustrations go, also plenty of the evidence regarding market allocation and market entry in Delivery Hero initially stems from WhatsApp chats.

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*All views are the author’s and do not represent those of clients.

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